Globalisation

Question 1

What is Globalisation?

Answer 1

How countries become closely integrated, this can be economically, socially, politically or culturally and how the world is slowly becoming a global communitiy

Question 2

How does globalisation affect the world?

Answer 2

Changes distance and time, people can interact, the world feels like it’s shrinking, connections are being formed with places that are far apart, the connections are becoming deeper

Question 3

Why are TNCs and new markets causing globalisation to accelerate?

Answer 3

TNCs: produce, sell or are located in 2 or more countries, generate huge sums of money, have GDP greater than most countries, bring investment, spread technology, promote cultures, job creating + capital + technology = political influence
NM: as RICs/NICs improve GDP and living standards, new markets have emerged. Global share trading has expanded into RICs (Mumbai/Shanghai), growth of new markets (particularly China/India), present opportunities for growth

Question 4

Why are improved communications and International Organisations causing globalisation to accelerate?

Answer 4

IC: (transport/information exchanges), transport speeds increasing means people have access to more products and are better connected, Electronic communications allow instant exchange of information, people can interact all over the globe (shrinking world)
IO: bring money, people and information together, World Bank offers money to poorer nations to develop/help attract investment, IMF regulate trade between countries to encourage greater global trade

Question 5

What are LEDCs?

Answer 5

Least developed countries, around 50 countries (Ethiopia), low incomes, weak economy, low education provision, high debt levels, economy based on agriculture

Question 6

What are LDCs?

Answer 6

Less economically developed countries (Bangladesh), improving economies, primary education provision, less debts, economy moving into secondary sector

Question 7

What are NICs?

Answer 7

Newly industrialised countries, fast growing economy in manufacturing/exporting, agricultural sector has shrunk, good educational investment, moved into the tertiary and Quaternary sector

Question 8

What are RICs?

Answer 8

Recently industrialised countries

Question 9

What are FCCs?

Answer 9

Former communist countries, middle income but many have stagnant populations, many have good natural resources (Russia - gas)

Question 10

What are MEDCs?

Answer 10

More economically developed countries, developed tertiary/Quaternary sectors, manufacturing declining except in high tech products, most TNCs situated in these countries (USA), G8: group of the most powerful economies on the planet, excluding China

Question 11

What are BRICs?

Answer 11

Brazil, Russia, India, china - 4 of the biggest 10 economies on earth and are increasingly a powerful group in world affairs

Question 12

What is OPEC?

Answer 12

Organisation of Petroleum Exporting Countries, 13 members (inc. Saudi Arabia), very powerful, to be a member you must export more than you import

Question 13

What is OECD?

Answer 13

Organisation for Economic Corporation and Development, 30 of the richest and most powerful countries, discuss political, social, economic and environmental problems

Question 14

What are Trade Blocs?

Answer 14

Group of countries that make agreements to reduce barriers - this increases trade and improves cooperation between countries, usually involves reducing tariffs or taxes on imported goods

Question 15

What are the benefits of Trade Blocs? name 2 examples

Answer 15

Access to a larger market, increased sales, buy raw materials in bulk so can negotiate discount, countries in agreement can focus on developing specific industries (UK - finance/banking, Italy - car manufacturing)
EU, NAFTA (North American Free Trade Agreement) - USA = capital, Canada = raw materials, Mexico = cheap labour

Question 16

Name the 4 ways TNCs create links between countries

Answer 16

1. Mergers: when two similar companies become one (EE) - creates links
2. Acquisitions: when one company buts another (Ford buying Volvo)
3. Using Sub Contractors: TNCs use foreign companies to produce their products (Apple use Foxconn)
4. FDI: gives a TNC long term investment in a country (Nike in Vietnam)

Question 17

What are the criticisms of TNCs?

Answer 17

Leakage - most profits head back to the HQ of the TNC
They are footlose and exploit economic conditions in countries and then move to more favourable conditions
They can exert political influence over governments in poorer countries

Question 18

Describe a switched on place

Answer 18

Highly connected place and due to this; trade, money, people and information flow easily between them and other global hubs
Large consumers and producers of goods due to their strong connections
High ecological footprint and have a big impact on the environment due to their high levels of production and consumption

Question 19

Name an example of a switched on place

Answer 19

Singapore - global hubs as a financial, manufacturing and tourist centre

Question 20

Describe a switched off place

Answer 20

Poorly connected/remote areas - some money can flow into these places (aid) but there is little trade with other countries
Do not consume and produce due to being poorly connected to global networks, so are not potential markets for TNCs
Low energy usage and ecological footpring

Question 21

Name an example of a switched off place

Answer 21

Bhutan in the Himalayas - landlocked so tourism and internet accesses is limited, economy is based on subsidence

Question 22

How does techonology make the world interconnected?

Answer 22

Telecommunications (internet, air travel create global networks - e.g. Ryanair - cheap, accessible through internet, flies to range of destinations across Europe
Flight destinations become hubs and become connected and have multipier effect - boosting the local economy and becoming switched on
Trade can be encouraged and increase cultural exposure through visiting different countries
Examples of cities which have benefited: Riga in Latvia, Valencia in Spain, Bratislava in Slovakia

Question 23

How have physical resources helped UAE become a global winner?

Answer 23

UAE = collection of oil states that derive their wealth from oil, the trade of oil and generate petrodollar wealth
Has physical coastal links and a developed international airport at Abu Dhabi
The money generated from oil gives comparative advantages and this can be used to develop other parts of the economy (manufacturing, tourism, service sectors) as well as investment in communication, infrastructure and education
Wealth can be invested abroad (Sovereign Wealth funds) and this develops connections

Question 24

How have human resources helped India become a global winner?

Answer 24

RIC with 1.1bn people - this provides relatively cheap labour for manufacturing/service industry
Manufacturing has grown rapidly through investment of TNCs
Cheap educated and skilled labour means costs are reduced and productivity is high
India has a comparative advantage in human resources compared to China as it has a much younger, less dependent population
As more people are earning regular wages, more tax can be earned and these is a larger market for TNCs to invest and sell products in increasing connectivity

Question 25

What are Global Losers?

Answer 25

Countries that remain switched off

Question 26

Why do physical difficulties create global losers?

Answer 26

Physical isolation, poor leadership (Zimbabwe, due to democratic system - trade sanctions, loss of tourism) and political isolation (North Korea)
Consequences: wasted or unused valuable resources, conflict, starvation, disease
Las Vegas: shouldn’t be a connected place due to it being in a desert
Sierra Leone: should be rich and connected through diamonds, but civil was has switched it off

Question 27

What are the 2 main moral and social consequences of globalisation?

Answer 27

As countries become more globalised, TNCs often sub contract manufacturing creating sweatshop conditions for millions of workers. These is often rural to urban migration (brain drain) for jobs and this often leads to exploitation due to the increased competition to find work
Exploitation can include low wages (below $1 a day), poor health and safety leading to amputations/death, workers have little or no rights for sickness, poor conditions, if they strike they may lose their job

Question 28

Name 5 environmental consequences of globalisation

Answer 28

1. Food miles create CO2 as more food is produced in RICs (Brazil - biggest producer in the world)
2. Deforestation for timber is increasing in Brazil or Indonesia for palm oil/soya
3. Waste more cheap products produced in RICs creates a throwaway society, putting pressure on landfills and the environment through toxic run off
4. Oil pollution by increased consumption by RIC/NIC can lead to CO2/potential accidents in oil movements
5. Although recycling is a way of reducing waste, most UK recycling is shipped to China or India creating transport pollution

Question 29

How can the government solve the problems of globalisation?

Answer 29

Carbo credits
Kyoto Protocol
Reduce deforestation/increase afforestation
Encourage local trade to cut down on transport emissions
Place environmental tax on TNCs who import manufactured goods
Make TNCs pay tax, not move money offshore

Question 30

How can businesses sole the problems of globalisation?

Answer 30

TNCs, such as Tesco, could label products to show air miles and put greater emphasis on local products
Use more recycled products in their disposable products, such as carrier bags
Stop sweatshop products being sold by labelling products, such as clothes (GAP)
Make TNCs fund programmes to improve quality of life in RICs/LEDCs

Question 31

How can individuals sole the problems of globalisation?

Answer 31

Encourage fair trade, this can encourage grown and better working conditions for workers and create positive multiplier effect
Buy local produce - lower emissions and can be a higher quality - not lost in the highly polluting food production infrastructure
Encouraging recycling as part of the waste hierarchy
Through social media, put pressure on TNCs exploiting workers